A guide for the perplexed

The PPC2000 partnering contract's multi-party approach leaves some users scratching their heads. But now there's a new document hoping to clear it all up

PPC2000, which for those of you who have been held hostage by Colombian guerrillas for the past three years and have therefore not come across it, is the flagship partnering contract (its associated specialist contract is SPC2000).

PPC2000 set out to address those issues raised by both the Latham and Egan reports as being key to improvement in the construction industry – partnering and the involvement of the supply chain, for instance. It was pretty radical when it was introduced and remains a hot topic. Two main differences between PPC2000 and more traditional forms of construction contract are:

PPC2000 is a multi-party contract arrangement. The contract is signed by the client, consultants, constructor and specialist contractors progressively as they join the project team. Additional "joining agreements" are used to add contract parties.

It introduces an independent partnering adviser who offers support and advice to the partnering team members – in other words, they sustain the partnering ethos. They also deal with contracts, joining agreements, pre-possession agreements and dispute resolution.

Because PPC2000 is such a departure from more traditional contracts, it has always proved a bit of a struggle for those who have not used it before. When newcomers to the contract read it, they frequently come back with questions about what it actually means in practice. The contract can be difficult to understand as the key elements, such as risk-sharing arrangements and key performance indicators, are left as headings with the detail to be completed later.

So applause, please, for the ACA, the publisher of the contract, which on 12 June launched its Guide to the ACA Project Partnering Contracts PPC2000 and SPC2000.

When newcomers to the contract read it, they often come back with questions about what it actually means

The guide, just short of 100 pages, covers a lot of ground. The first part describes the background and thinking behind the contract: what it is; how it fits with Egan; what is partnering; and why should you use it? It then describes the multi-party approach, the processes that underpin the contract and the documents that are required to make up the contract. All interesting and informative stuff, particularly to the newcomer.

The main part of the guide is a clause-by-clause explanation of the two contracts. Each subclause is covered, even those that are pretty self-explanatory in the original contract. And therein lies an irritation. For example, looking at the contract clause on partnering team meetings, I would like the guide to add to my understanding. In fact, it merely states that the clause deals with meetings. But this is a minor niggle that could be overcome by setting someone on the task of highlighting the crucial text.

The rest of the guide covers the role of the partnering adviser, common pitfalls and a number of checklists and flow charts, which are useful as belt-and-braces "have we followed the process" documentation.

Given the radical nature of the contract, the newcomer could do with a bit more practical advice. For instance, how do you determine what KPIs to adopt? What do you need to consider in respect of payment on determination? What issues are involved when you need to set out proposed methods of communication?

So should you go out and buy it? Yes. Beginners will find that PPC2000 becomes a bit more understandable. Those who are working on PPC2000 contracts already will find that there is enough to help them along and satisfy them.

Postscript

Andrew Hemsley is managing director of consulting at Cyril Sweett and can be reached on 020-7061 9007, or at andrew.hemsley@cyrilsweett.com.